South Carolina Economy Overview

Currency

United States Dollar (USD)

Working hours

40 hours/week

Public/bank holidays

South Carolina observes the 11 federal holidays.

Capital

Columbia

Languages

English 

Population

Approx. 5.3 million (2023 estimate)

Minimum hourly salary

USD 7.25 (federal minimum; South Carolina does not have a higher state minimum)

Tax year

1st Jan – 31st Dec

Date format

MM/DD/YYYY

Misclassification penalties

Misclassifying employees as independent contractors can result in significant penalties, including back taxes, fines, and liability for unpaid wages. Both federal and state agencies may impose these penalties.

Fun fact

Charleston hosts the annual Spoleto Festival USA, a 17-day event featuring opera, dance, theater, and music, attracting artists from around the world.

South Carolina offers convenient market access through its strategic East Coast location, world-class infrastructure, and business-friendly environment. The Port of Charleston, one of North America’s most efficient operations, directly connects businesses to significant import/export volumes with China, Germany, India, Japan, and other key trading partners across multiple continents.

At the same time, the state’s comprehensive transportation network includes five interstate highways, extensive rail coverage, and international airports. These logistical advantages have attracted major international investment, with more than 1,100 global companies operating in the state and 890 international employers establishing a presence.

Beyond infrastructure, South Carolina delivers competitive business costs, skilled workforce development through its technical college system, and attractive tax incentives that attract and retain talent.

Overview of South Carolina's Economy

South Carolina boasts a diverse economy with a GDP of $262.3 billion, expected to grow by 5% despite inflationary pressures, thanks to several key industries: 

According to World Atlas, tourism generates $15 billion annually and supports over 10% of the state’s jobs in popular destinations like Myrtle Beach, Charleston, and Hilton Head Island. The automotive sector also has a strong presence, with BMW and Volvo manufacturing facilities contributing $27 billion to the GDP. Aerospace has expanded since Boeing established operations in North Charleston, with over 400 companies and 22,000 employees.

Still, agriculture is fundamental to the state’s economy, contributing $14.7 billion and supporting 68,000 jobs through diverse products, including greenhouse nurseries, poultry, and traditional crops such as corn, cotton, soybeans, broilers, and peaches. Additional sectors of interest include technology, and an energy sector projected to quadruple its solar power economic impact with a $19 billion injection into the state.

SectorWhy It’s Critical to South Carolina
Tourism & HospitalityGenerates $15B annually, fueling over 10% of the state’s workforce in Myrtle Beach, Charleston, and Hilton Head.
Automotive ManufacturingA $27B powerhouse, exporting BMW, Volvo, and Michelin vehicles worldwide from South Carolina’s production hubs.
Aerospace & AviationHome to Boeing, Lockheed Martin, and 400+ aerospace companies, providing 22,000+ high-paying jobs.
Agriculture & AgribusinessValued at $14.7B, supplying the U.S. with poultry, soybeans, cotton, and peaches while supporting 68,000 workers.
Technology & Clean EnergyColumbia’s tech salaries are 78% above the state average, while South Carolina is quadrupling solar energy output with a $19B investment.

As of December 2024, South Carolina achieved a record number of employed residents, with 2,417,169 working, a welcome increase of 21,742 jobs compared to December 2023. There is a high demand for skilled workers, such as CNC machinists, industrial engineers, and robotics technicians. Tech jobs in Columbia, a major hub, offer average salaries of $96,763 – 78% higher than the state average, indicating a strong demand for skilled IT professionals.

These established industries present attractive expansion opportunities for international businesses looking to enter the U.S. market, particularly those that can contribute specialized expertise, innovative technologies, or complementary services to South Carolina’s thriving economic sectors.

Taxes

Employer Tax: 8.25% – 13.65%

Social Security (FICA)

6.2% 

Medicare (FICA)

1.45% 

Federal Unemployment Tax (FUTA)

0.6% (after credits, on first USD 7,000 of wages)

State Unemployment Insurance (SUI)

Typically 0.06% to 5.46% on the first $14,000 of wages.

Employee Tax: 7.65% – 13.95%

Social Security

6.2%

Medicare (FICA)

1.45%

State Income Tax

0% to 6.2%, depending on income brackets.

Gross income

Up to $3,560

More than $3,560

More than $17,830

Tax Rate

0.00%

3.00%

6.20%

Business Regulation in South Carolina

South Carolina doesn’t require a general state business license. However, businesses must obtain appropriate licenses from the city or municipality where they operate. Local licenses vary based on business type and projected revenue and are renewed annually. 

Businesses involved in manufacturing or with potential environmental impacts must obtain permits from the South Carolina Department of Health and Environmental Control (DHEC). These permits may include air quality control, water discharge, and hazardous waste management. 

Tax registration is another consideration. If you’re selling products, you must register for a Retail License with the Department of Revenue, which authorizes you to collect sales tax from customers and establishes your filing requirements. Depending on your business type, you may also need to register for employer withholding taxes and other specialized tax programs specific to your industry. 

As for corporate tax, South Carolina’s structure is straightforward and competative: C corporations pay a flat 5% tax on South Carolina taxable income. Both C and S corporations pay annual license fees of $1 per $1,000 of capital stock and paid-in surplus, plus a $15 base fee (minimum $25).

Pass-through entities like S corporations, LLCs, and partnerships have income flowing to individual owners, who can elect to have active trade or business income taxed at a flat 3% rate. Businesses selling tangible goods must collect a 6% state sales tax, with local jurisdictions potentially adding up to 1% in additional taxes. Employers are expected to handle unemployment insurance tax payments and state income tax withholding for employees.

What Are the Benefits of Doing Business in South Carolina?

In addition to a low 5% corporate tax rate, there is no state property tax, local income tax, or inventory tax, making South Carolina one of the more business-friendly environments in the Southeast. Manufacturers can also use investment tax credits for new production equipment, a 5% research and development credit for qualified expenses, and port volume increase credits for using South Carolina ports.

The state invests heavily in workforce development resources, with programs like readySC™ providing customized workforce training and recruitment services at no cost to companies, and Apprenticeship Carolina™, which facilitates programs to build specialized skills and provide a steady pipeline of skilled labor in manufacturing, healthcare, IT, construction, and transport and logistics.

From a logistics perspective, South Carolina’s East Coast location offers easy access to major population centers, while deep-water port facilities in Charleston cater to international shipping needs. The state has five Foreign Trade Zones that grant duty deferral, reduction, or elimination benefits and an extensive interstate highway system, rail network, and international airports.

What Are the Downsides of Doing Business in South Carolina?

South Carolina’s low unionization rate may complicate recruiting specialized talent for industries requiring advanced technical skills. The state’s low average wages ($7.25 per hour) create a double-edged sword: while reducing operational costs, they can impede efforts to attract and retain high-caliber talent.

Moreover, the region’s coastal location exposes businesses to hurricane and flooding risks. Such natural disasters lead to operational disruptions, infrastructure damage, and elevated insurance premiums.

South Carolina’s heavy dependence on manufacturing has created a sectoral imbalance in its economy, intensifying competition for skilled labor and industrial facilities. International firms outside manufacturing often find less robust support infrastructure.

A case in point is that despite the state’s export strength, smaller international companies frequently struggle to compete with dominant manufacturers like BMW and Boeing for access to critical export resources and logistics infrastructure.

Lastly, shifting U.S. trade policies and a potential globalization backlash create an unstable environment for foreign direct investment. International firms that rely on consistent trade conditions may face heightened strategic planning challenges.

International Expansion into South Carolina

For businesses considering international expansion into South Carolina, the following options can be explored:

South Carolina Employer of Record (EOR)

An Employer of Record (EOR) becomes the complete legal employer of a business’s workforce. The EOR takes full responsibility for all employment liabilities and compliance while the business directs the work without having direct legal employment relationships.

This model is ideal for international companies entering the South Carolina market or businesses needing to hire quickly without establishing local legal entities.

Recruitment Agencies

South Carolina-based recruitment agencies specialize in industries such as manufacturing, automotive, aerospace, and logistics. Whether you’re hiring for Charleston’s growing tech sector, Greenville’s thriving automotive industry, or skilled labor in the state’s robust manufacturing sector, these agencies help businesses find top talent while ensuring compliance with South Carolina labor laws.

South Carolina Professional Employer Organization (PEO)

A Professional Employer Organization (PEO) creates a co-employment relationship where businesses share employer responsibilities with the PEO. The foreign company retains day-to-day control over employees while the PEO handles administrative HR tasks.

This arrangement works best for established South Carolina businesses looking to reduce HR burden while maintaining management authority.

Subsidiary Incorporation

International businesses entering South Carolina can establish their presence through different subsidiary structures, regardless of the specific legal entity type they choose (LLC, Corporation, etc.).

If a business opts for a wholly-owned subsidiary, the parent company maintains 100% ownership of the subsidiary’s shares, giving it complete control over operations and decision-making processes. This structure allows companies to implement global strategies without compromise.

Branch Registration

If a business prefers a partially owned subsidiary, the parent company holds majority ownership (more than 50% of shares) but not complete ownership. A branch registration allows international firms to form local partnerships while retaining decision-making control.

Foreign companies establishing a South Carolina branch must register as foreign entities by obtaining a Certificate of Authority. Note that this requires a Certificate of Existence from their home jurisdiction. Companies must also obtain an Employer Identification Number (EIN) from the IRS and comply with local licensing requirements.

Business Opportunities in South Carolina

South Carolina’s strong manufacturing base, expanding tech sector, and booming tourism industry make it one of the most business-friendly states in the U.S. With a GDP of $262.3 billion and 5% projected growth, the state offers low corporate taxes, a skilled workforce, and access to global trade through the Port of Charleston—one of the busiest ports on the East Coast.

For entrepreneurs and investors, sectors with high demand, strong infrastructure, and workforce availability present the best opportunities.

Business Opportunity Why It’s Profitable
Auto Parts & Advanced Manufacturing With BMW, Volvo, and Michelin leading a $27B sector, the demand for auto parts, specialty machining, and robotics integration is rising.
Aerospace Components & Engineering Boeing and 400+ aerospace firms require precision manufacturing, maintenance services, and engineering solutions to support growth.
Solar Energy & Infrastructure A $19B investment in solar power is driving demand for panel installation, battery storage, and energy efficiency consulting.
Freight & Warehousing Services The Port of Charleston, I-95 corridor, and major manufacturers fuel demand for trucking, fulfillment centers, and logistics hubs.
Tourism & Short-Term Rentals With 20M+ visitors annually, opportunities exist in vacation rentals, boutique hotels, and tourism-related experiences.

South Carolina’s pro-business policies, low taxes, and skilled workforce make it a prime location for startups and expansions. The state actively attracts foreign direct investment (FDI) and offers incentives for businesses in high-growth sectors like manufacturing, energy, and logistics.

For entrepreneurs looking to tap into growing industries with high demand, access to talent, and state-backed incentives, South Carolina is one of the best markets in the Southeast.

Expand into South Carolina with Remote People

South Carolina’s proven track record with international firms provides a blueprint for success for decision-makers evaluating locations for new ventures or expansions. However, the journey from market evaluation to operational excellence often benefits from specialized expertise.

For instance, Remote People offers Employer of Record (EOR) services that handle all local HR compliance, payroll processing, and tax filings. Our Employee Ownership Solutions (EOS) create flexible talent engagement models without establishing a legal entity, allowing you to focus on business growth while we manage the administrative complexities.

Contact us now for your personalized expansion roadmap and see why companies choose Remote People as their business advantage.